Brazil poised to export near-record corn volume this season
SAO PAULO (Reuters) - Bolstered by a bumper winter crop, Brazil is poised to export near-record volumes of corn this year, remaining a strong competitor against the United States and Argentina in global markets.
The attractiveness of Brazil's corn to growers is amplified by government auctions guaranteeing a premium to market prices, depressed because of ample supplies.
The nation will export 28 million tonnes this season, says the government, while the cereals exporter association Anec projects 30 million tonnes, practically the same as two seasons ago, when the country registered record sales abroad.
"Brazil's corn is already more competitive than U.S. corn," said Enilson Nogueira, an analyst at consultancy Céleres.
As winter corn harvesting advances in key states like Mato Grosso, he predicted, Brazil will export between 4 million and 5 million tonnes per month between July and February.
"Exports are the only exit to reduce excess domestic supplies," he said.
Government corn auctions, which so far this year pushed growers to sell about 4.5 million tonnes on the market, are also increasing the amount available for export, said Anec.
Still, carryover stocks this season are expected to reach a historic high, INTL FCStone analyst Ana Luiza Lodi said. Forecasting exports of 28 million tonnes, she said any serious problems with U.S. corn could benefit Brazil's exporters.
According to the U.S. Department of Agriculture, Brazil has replaced leading Northern Hemisphere exporters in the global corn market, from September to January, with its winter corn crop. A USDA study also found that Brazil's corn export growth averaged 21 percent annually over a decade through the 2014/15 season.
The bumper crop is leading farmers in the mid-north of Mato Grosso to leave some corn in open fields after harvesting. The temporary arrangement is viable because July is a dry month, said growers association Aprosoja.
But this year, the storage issue worsened as producers hoarded soybeans amid low prices. At this point, proceeds from corn sales will be used by farmers rotating crops to pay bills and finance the next soy crop, Anec said.
Mato Grosso's corn production grew by 680 percent in 12 years, according to Aprosoja.
Favorable weather and productivity gains led the government to forecast total corn production of 96 million tonnes, a 44 percent increase from the previous cycle and an all-time record.